NFA's Articles of Incorporation provide for ten Public Representative positions on NFA's Board of Directors ("the Board") as of the Board's annual meeting in mid-February 2011. In defining "Public Representative," Article XVIII states that a Public Representative on NFA's Board is a public director as that term is defined in Section (b)(2) of Core Principle 15 in Appendix B to Part 38 of the CFTC's Regulations. Although Core Principle 15 specifically applies to contract markets, the same disqualifying circumstances regarding "material relationships" set forth therein apply to NFA's Public Directors. A printout of that section of the Regulations is attached for your information.

The terms of two current Public Representatives - Silas Keehn and Charles P. Nastro - are set to expire at the Board's 2011 regular annual meeting. Mr. Keehn and Mr. Nastro are eligible for re-election. Furthermore, last year Article VII was amended to provide for the election of three additional Public Directors to the Board at its February 2011 meeting. NFA is asking its Members for nominations to fill these five vacancies on the Board. At the Board's regular annual meeting, scheduled for Thursday, February 17, 2011, the Board will select from among the nominees five Public Representatives to serve on the Board for two-year terms.

Because public representation on NFA's Board of Directors is an important matter, we ask that you give serious consideration to submitting a nomination to fill these vacancies. All nominations must be received at the address below or by fax on or before Wednesday, December 22, 2010.

(i) To qualify as a public director of a contract market, an individual must first be found, by the board of directors, on the record, to have no material relationship with the contract market. A "material relationship" is one that reasonably could affect the independent judgment or decision making of the director.

(ii) In addition, a director shall be considered to have a "material relationship" with the contract market if any of the following circumstances exist:

(A) The director is an officer or employee of the contract market or an officer or employee of its affiliate. In this context, "affiliate" includes parents or subsidiaries of the contract market or entities that share a common parent with the contract market;

(B) The director is a member of the contract market, or an officer or director of a member. "Member" is defined according to Section 1a(24) of the Commodity Exchange Act and Commission Regulation 1.3(q);

(C) The director, or a firm with which the director is an officer, director, or partner, receives more than $100,000 in combined annual payments from the contract market, or any affiliate of the contract market (as defined in Subsection (2)(ii)(A)), for legal, accounting, or consulting services. Compensation for services as a director of the contract market or as a director of an affiliate of the contract market does not count toward the $100,000 payment limit, nor does deferred compensation for services prior to becoming a director, so long as such compensation is in no way contingent, conditioned, or revocable;

(D) Any of the relationships above apply to a member of the director's "immediate family," i.e., spouse, parents, children and siblings.

(iii) All of the disqualifying circumstances described in Subsection (2)(ii) shall be subject to a one-year look back.

(iv) A contract market's public directors may also serve as directors of the contract market's affiliate (as defined in Subsection (2)(ii)(A)) if they otherwise meet the definition of public director in this Section (2).

(v) A contract market shall disclose to the Commission which members of its board are public directors, and the basis for those determinations.

NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets.